Investing Cash Flow

A healthy growing company usually shows negative investing cash flow, because it is spending on plant and acquisitions — negative here is not a warning, it is the point. What deserves scrutiny is the composition: capital expenditure that expands capacity is different from purchases of unrelated investments, and repeated large 'loans to related parties' inside this section is a well-known route for cash to leave a listed company. Persistently positive investing cash flow means assets are being sold, which is either a strategic exit or a liquidity crisis. Comparing capital expenditure with depreciation shows whether the asset base is growing or merely being maintained.